October 11, 2018 | Success Stories

Investing in Future Growth: Making More Strategic Moves with a Fortune 500 Retailer

The Customer

The customer is an American multinational department store chain that operates warehouses in the Greater Toronto Area (GTA) to supply its nearly 500 stores across Canada. The company is a leading retailer for off-price fashions and home goods, boasting more than $33 billion in annual revenue and employing 235,000 people worldwide.

The Challenge

With three distribution centres across the GTA and in anticipation of adding a fourth, the customer recognized that they needed better yard management logistics, including shunting and shuttling support between centers. Beyond simple “truck and driver” offerings, the customer was looking for an experienced logistics partner who could provide new technologies, better planning, and greater flexibility and visibility throughout this piece of the supply line. If successful, the plan was to scale up operations as business in Canada grew. That said, budgets were an issue as well. The solution provided had to be well within the retailer’s budget objectives without skimping on service. This was especially a challenge given that there were other bare-bones courier services trying to win the business as well. When NSSL received the request for proposal, they realized that they were the only operation that could not only provide the needed shunting service, but also a full yard audit with efficiency analysis, and a plan to modernize the retailer’s current and future yards and warehouses. NSSL saw an opportunity to surpass the retailer’s expectations and provide operational excellence by modernizing their yard operations.

4 Distribution Centers

The Solution

The first hurdle was the budget considerations. NSSL came up with a plan that the customer could work worth, adding value over time and securing a contract that would help both parties in the long run. As a sign of good faith, NSSL supplied the yards with their proprietary yard management software, Shuntware. NSSL had conducted time studies to show how this proprietary software could help make each shuttle job more efficient and keep drivers moving shipments instead of standing around waiting for a job. Additionally, the implementation of Shuntware YMS brought with it a centralized dispatcher with the visibility to adjust the number of trucks and staff. This not only cut down on the tedious manual paperwork that drivers had to fill out, but it allowed data to be tracked more carefully so that NSSL could conduct yard audits and find further efficiencies in their operation. For example, NSSL noticed that the customer was running extra trucks to smooth over variations in activity. While this meant that operations did not slow down when things were busy, it also meant more trucks and drivers sitting around when things got slow. Needless to say, this conservative approach was causing them to run inefficiently. At its peak, the retailer was running 15 trucks to convey all of their goods, shuttling 60 trailers across 5 nodes. NSSL was able to get this down to just six trucks to handle the same amount of goods. This had the effect of reducing the number of moves, and thus also reducing cost and risk. By encouraging the retailer to look past short-term costs and consider long-term efficiency, NSSL was able to help them take a more sophisticated approach to yard management than a traditional truck-and-driver company could provide.

The Results

NSSL has increased productivity and decreased cost for this customer. By digitizing the process, adding new system structures, and constructing new work forms for dispatch to use, NSSL organized the workforce and decreased the complexity of the operation, with all its inefficiencies. The new yard management software reduced headcount, and although it came with an upfront cost, there were substantial long-term cost savings. Furthermore, with fewer trucks on the road, NSSL has managed to mitigate the customer’s risk and refine their operations to keep up with demand throughout the peak season with just a fraction of the resources. The customer now has a clear picture of their productivity on an individual basis by tracking times, move counts and daily logs with in-depth shuttle breakdowns. This gives them the ability to make smarter decisions and plan for work based on data and the actual network. The retailer saved a considerable amount of money in the first three years of working with NSSL and has continued to invest in Shuntware and further service from NSSL. As their business continues to grow and thrive, they reinvest by increasing their level of service from NSSL. The partnership has been so successful that NSSL is now also providing shunting services at the retailer’s new standalone centre in British Columbia, which is experiencing similar increases in operational proficiency.